Quarterly Financial Report For the quarter ended September 30, 2022

Management Statement for the Quarter Ending September 30, 2022

1. Introduction

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board under the Treasury Board Directive on Accounting Standards: GC 4400 Departmental Quarterly Financial Report. It should be read in conjunction with the Main Estimates and Supplementary Estimates for the current year.

The quarterly report has not been subject to an external audit or review.

1.1 Canadian Transportation Agency Mandate

The Canadian Transportation Agency (CTA) is an independent, quasi-judicial tribunal and regulator that has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court. The CTA has three core mandates:

• It helps ensure that the national transportation system runs efficiently and smoothly in the interests of all Canadians: those who work and invest in it; the producers, shippers, travellers and businesses who rely on it; and the communities where it operates.
• It protects the human right of persons with disabilities to an accessible transportation network.
• It provides consumer protection for air passengers.

To help advance these mandates, the CTA has three tools at its disposal:

• Rule-making: It develops and enforces ground rules that establish the rights and responsibilities of transportation service providers and users and that level the playing field among competitors. These rules can take the form of binding regulations or less formal guidelines, codes of practice or interpretation notes.
• Dispute resolution: It resolves disputes that arise between transportation providers on the one hand, and their clients and neighbours on the other, using a range of tools from facilitation and mediation to arbitration and adjudication.
• Information provision: It provides information on the transportation system, the rights and responsibilities of transportation providers and users, and its legislation and services.

Further information on the CTA’s mandate, roles, responsibilities and programs can be found in Part III of the Estimates – Departmental Plan.

1.2 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the CTA's spending authorities granted by Parliament, and those used by the CTA consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2022-2023 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts, or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The CTA uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of the Fiscal Quarter and the Fiscal Year-to-Date (YTD) Results

2.1 Statement of Authorities

The CTA’s total authorities available for use in 2022-2023, totalling $42,581,756, have increased by $1,195,361 when compared to the same period in the previous fiscal year as illustrated in the Statement of Authorities and in the Departmental Budgetary Expenditures by Standard Object below. This increase in authorities available for use is primarily attributable to an increase in the Employee Benefit Plans (EBP) budgetary statutory authorities granted by Parliament.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the second quarter have decreased by $1,221,084 from $10,383,000 to $9,161,916, as illustrated in the Departmental Budgetary Expenditures by Standard Object below.  This decrease is mainly attributable to a decrease in the Personnel and Professional and special services expenditure category as explained below.

• The expenditures in the Personnel category have decreased by $1,106,617. As the CTA only received temporary funding to address its operational pressures, staffing actions have been primarily determinate and casual in nature. This situation has resulted in a high level of attrition as employees leave the CTA to pursue more stable employment in other departments. It has also caused significant delays in recruitment as the CTA struggles to attract new talent in this highly competitive context.
• The expenditures in the Professional and special services category have decreased by $466,699 and are primarily due to the costs incurred in the second quarter of 2021-2022 associated with the Government of Canada Workplace 2.0 Fit-up Standards project, as the majority of the work of this project was completed in 2021-2022.

With respect to all other budgetary expenditures by Standard Object, overall expenditures are similar to those of the previous fiscal year. Any difference is primarily attributable to the period in which the purchases were settled.

3. Risks and Uncertainties

The CTA continues to see an upward trend in its incoming complaints volumes – between the start of 2022-2023 and the end of September 2022, the CTA received more than 17,500 complaints, representing an increase of 250% in comparison to the complaints received in the first two quarters of 2021-2022. This upward trend in complaints volume corresponds to the increase in post-pandemic travel and the significant number of flight disruptions and delays seen in Canada's largest airports as transportation service providers are navigating through challenges related to their recovery. This increase in incoming complaints, in excess of previous projections, will result in a further rise in the CTA's backlog of complaints, currently sitting at approximately 25,000 complaints.

The supplemental funding the CTA received through Budget 2022 to help address the number of incoming complaints is for 2022-23 only. This time limited funding has allowed the CTA to maintain existing processing capacity, while also identifying potential areas for process improvements moving forward. The temporary nature of the funding has resulted in high employee turnover and increased efforts dedicated to recruiting and training new employees.

4. Significant Changes in Relation to Operations, Personnel and Programs

The CTA continues to maintain its normal operations while its employees continue to work remotely and provide service using electronic means.  The CTA is facing a unique challenge as employees will return to work in a brand new facility at 60 Laval Street in Gatineau, Québec.  However, as at September 30, 2022, the new facility is still not in a position to accommodate the CTA's staff complement.  The facility will be ready to welcome employees in December 2022 at which time a hybrid work model will be implemented.

Approval by Senior Officials

Approved by:

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Statement of Authorities (unaudited)

Fiscal year 2022-2023

	Total available for use for the year ending March 31, 2023*	Used during the quarter ended September 30, 2022	Year to date used at quarter-end
Vote 1 – Program expenditures	36,985,326	8,276,519	15,879,354
Budgetary statutory authorities − Employee Benefit Plans	5,596,430	885,397	1,770,794
Total authorities	42,581,756	9,161,916	17,650,148

Fiscal year 2021-2022

	Total available for use for the year ending March 31, 2022*	Used during the quarter ended September 30, 2021	Year to date used at quarter-end
Vote 1 – Program expenditures	36,780,005	9,231,403	17,994,011
Budgetary statutory authorities − Employee Benefit Plans	4,606,390	1,151,597	2,303,194
Total authorities	41,386,395	10,383,000	20,297,205

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2022-2023

Expenditures:	Planned expenditures for the year ending March 31, 2023	Expended during the quarter ended September 30, 2022	Year to date used at quarter-end
Personnel	35,835,297	8,005,640	15,720,357
Transportation and communications	426,186	88,508	143,645
Information	357,770	115,297	216,886
Professional and special services	3,125,687	449,933	781,367
Rentals	2,526,739	438,227	687,579
Repair and maintenance	78,075	10,999	10,999
Utilities, materials and supplies	105,204	28,956	61,624
Acquisition of machinery and equipment	127,474	22,942	28,367
Other subsidies and payments	(676)	1,414	(676)
Total net budgetary expenditures	42,581,756	9,161,916	17,650,148

Fiscal year 2021-2022

Expenditures:	Planned expenditures for the year ending March 31, 2022	Expended during the quarter ended September 30, 2021	Year to date used at quarter-end
Personnel	36,128,798	9,112,257	18,228,375
Transportation and communications	276,332	24,936	43,855
Information	214,373	75,519	150,682
Professional and special services	3,338,933	916,632	1,219,327
Rentals	613,661	201,430	486,111
Repair and maintenance	242,198	4,589	12,317
Utilities, materials and supplies	96,296	2,937	48,961
Acquisition of machinery and equipment	451,642	45,965	83,415
Other subsidies and payments	24,162	(1,265)	24,162
Total net budgetary expenditures	41,386,395	10,383,000	20,297,205